Attorney General: Reading banker allegedly steals millions

Monday

Jul 1, 2013 at 12:01 AMJul 1, 2013 at 1:11 AM

A former personal banker at the Bank of America branch in Reading has been indicted for stealing more than $2.1 million from 31 investors and customers, Attorney General Martha Coakley announced last week.

A former personal banker at the Bank of America branch in Reading has been indicted for stealing more than $2.1 million from 31 investors and customers, Attorney General Martha Coakley announced last week. During the scheme, the defendant allegedly conducted fraudulent transactions worth approximately $6 million and made payments back to investors and customers of nearly $3.8 million.

Elaina Patterson, age 53, of Wilmington, was indicted on June 25 by a Middlesex Grand Jury on charges of Larceny over $250 from a Person over Sixty (15 counts), and Larceny over $250 (16 counts).

“We allege that this defendant used her position as a banker to garner trust from friends and family, and then pushed fake investment opportunities that promised high rates of interest,” Coakley said. “Once this scheme began to unravel, we allege that she began to steal from customers in order to fund withdrawals from investors and cover her illegal activity.”

The AG’s Office began an investigation in November 2011 after the matter was referred by Bank of America during its initial internal investigation. Patterson worked as a personal banker at a bank branch in Reading, which was initially Bank of Boston, and later became Fleet Bank and then Bank of America. Authorities allege that between July 1999 and September 2011, Patterson made approximately $6 million in fraudulent transactions involving 31 investors and customers.

At the beginning of the scheme, Patterson allegedly persuaded family and friends to invest their money in accounts that she characterized as offering high interest rates, normally between 10 and 15 percent. Authorities allege that she regularly portrayed these accounts as being exclusively for high-level investors and corporations, but said that due to her position at the bank, she was able to set up these accounts for family and friends.

The investigation allegedly revealed that Patterson convinced 15 family members and friends to invest nearly $4.5 million as a part of this scheme, and that she issued fake certificate of deposit receipts and Form 1099s on bank forms to make the investments appear legitimate. Authorities allege that, in a number of instances, Patterson set up accounts in the investors’ names without their knowledge, put her own address on the accounts, deposited the investors’ funds, and used the money both to fund payments to other investors and to funnel money into her personal accounts.

Further investigation allegedly revealed that beginning in 2009, Patterson began stealing money from the accounts of customers, many of them elderly, in order to conceal her previous theft from investors. Authorities allege that Patterson stole almost $1.5 million from 16 different customers by forging signatures on withdrawal slips. She allegedly used approximately $400,000 of this amount to repay customers stolen from earlier in the scheme and the majority of the balance of that stolen money to fund “interest payments” and other payments to the investors.

In the end, investigators uncovered a total of approximately $6 million in alleged fraudulent transactions. Patterson made payments back to customers and investors of almost $3.8 million, leaving the total alleged net theft at more than $2.1 million.

A Middlesex County Grand Jury returned indictments against Patterson on June 25. She is scheduled to be arraigned in Middlesex Superior Court at a later date.

These charges are allegations, and the defendant is presumed innocent until proven guilty.

The case is being prosecuted by Assistant Attorney General Molly Parks, of AG Coakley’s Fraud and Financial Crimes Division, and was investigated by Investigators Kevin Floster and Jaclyn Morrill and Director Sallyann Nelligan of AG Coakley’s Financial Investigations Division, with assistance from members of the Massachusetts State Police assigned to the AG’s Office and the Reading Police Department, the AG’s Computer Forensic Laboratory, and Victim Witness Advocates Amber Foley and Shannon Legrice of the AG’s Victim Services Division. Bank of America cooperated in the investigation.